NIC changes for the self-employed
In the recent Autumn Statement, the Chancellor announced two important changes to National Insurance contributions (NIC) for the self-employed.
The first change concerns the removal of Class 2 NICs for the self-employed. This means that self-employed people with profits above £12,570 will no longer be required to pay Class 2 NICs from 6 April 2024. Class 2 NICs are currently paid by the self-employed in order to qualify for benefits such as the state pension.
This change effectively abolishes ... read more
NIC changes for employees from 6 January 2024
In the recent Autumn Statement, the Chancellor announced a significant change to National Insurance contributions (NIC) for employees.
There will be a cut in the main rate of Employee National Insurance from 6 January 2024. This will see Class 1 NICs reduced by 2%, from 12% to 10%, in a change set to benefit some 27 million employees.
This reduction will only apply to annual earnings between £12,570 and £50,270, meaning that the maximum saving is £754 a year. Average earners, bringing home ... read more
Corporation Tax marginal rate
The Corporation Tax main rate for companies with profits in excess of £250,000 increased to 25% on 1 April 2023. A Small Profits Rate (SPR) of 19% was also introduced from the same date for companies with profits of up to £50,000 ensuring these companies continue to pay Corporation Tax at the same rate as was previously the case.
Where a company has profits between £50,000 and £250,000 a marginal rate of Corporation Tax applies that bridges the gap between the lower and upper limits. The lower ... read more
Enterprise Investment Scheme investee businesses
The Enterprise Investment Scheme (EIS) is designed to help smaller higher-risk trading companies to raise finance by offering a range of tax reliefs to investors who purchase new shares in those companies.
To claim investor EIS tax reliefs, the company which issues the shares has to meet a number of rules regarding the kind of company it is, the amount of money it can raise, how and when that money must be employed for the purposes of the trade, and the nature of its trading activities.
The ... read more
Tax relief for R&D intensive SMEs
In the Autumn Statement it was announced that the existing R&D Expenditure Credit and Small and Medium Enterprise Scheme will be merged from April 2024.
It was also confirmed that there will be an enhanced regime for R&D intensive SMEs. The rate at which loss-making companies are taxed within the merged scheme will be reduced from 25% to 19%, and the threshold for additional support for R&D intensive loss-making SMEs will be lowered to 30%.
Loss-making companies claiming the ... read more
Summary of Companies House changes
The Economic Crime and Corporate Transparency Act received royal assent on 26 October 2023. The new Act provides Companies House with more power to reduce the abuse of corporate structures whilst at the same time tackling economic crime.
As part of the measures that will be introduced, Companies House will be streamlining the accounts filing options available to small and micro companies. At present, small businesses are able to file what are known as filleted accounts with Companies House. ... read more
What now, following the Autumn Statement
In some respects, the Chancellor’s predicament is deserving of a sympathetic ear; its as if he has a long journey ahead but has one foot firmly nailed to the floor.
Stagnant growth in the UK and global economy has driven up taxation in order to meet the goals set to reduce borrowing as a percentage of GDP.
Inflation is reducing but is still above the Bank England’s target to have inflation back to 2%. In which case we will likely have high interest rates for some time.
It is difficult to see ... read more
Directors’ duties and responsibilities
To be a director, you must be over 16 and not currently disqualified.
As a director your responsibilities include:
filing your company’s annual accounts and reports or appoint an accountant to do it for you
reporting changes in you or your company’s situation including changes of address
sending a confirmation statement every year to Company’s House
pay Corporation Tax, VAT, PAYE and National Insurance contributions due on time
Other key duties include:
You must ... read more
IHT – Giving away your home before you die
The majority of gifts made during a person's life, including gifting a home, are not subject to tax at the time of the gift. These lifetime transfers are known as 'potentially exempt transfers' or 'PETs'. These gifts or transfers achieve their potential of becoming exempt from Inheritance Tax (IHT) if the taxpayer survives for more than seven years after making the gift. There is a tapered relief available if the donor dies between three and seven years after the gift is made.
HMRC’s guidance ... read more
CGT - Lettings relief
In general, there is no Capital Gains Tax (CGT) on a property which has been used as the main family residence. This relief from CGT is commonly known as Private Residence Relief or PRR. However, where part of the home has been let out the entitlement to relief may be affected. Homeowners that let out part of their house may not benefit from the full PRR but can benefit from letting relief. Since April 2020, letting relief has been restricted to homeowners who live in their property and partly ... read more